Brazilian election: one battle over but another begins for Dilma Rousseff

• Incumbent greets narrow election win with humility
• Momentum seems to be against her in second term

There was a familiar ring to Dilma Rousseff’s victory speech after she won the closest Brazilian presidential election in more than a century.

Having scraped back into power with the support of 54.5 million of the 143 million eligible voters, the Workers’ party leader said she recognised the need for change, that her second term would be characterised by dialogue, and that her priority would be political reform – particularly campaign financing and greater representation for women.

“Every election has to be seen as a form of change, especially for us who live in one of the largest democracies in the world,” she said. “The heat released in the dispute must be transformed into constructive energy.”

This humble message sounded like a sensible way to reunite a nation after a divisive and often bitter campaign. But it was also remarkably similar to the conciliatory language the president used last year to placate the million-plus protesters who took to the streets in a wave of demonstrations against poor public services, corruption and police brutality.

Back then, her promises to reform the political system quickly proved illusionary. Within days, congress in effect killed the plan. The limits on the president’s powers were all too apparent.

This time, she is hoping to bypass that obstacle by calling for a plebiscite. “With a referendum, we will find the power and the legitimacy required at this time of transformation,” she said.

A meaningful revision of the Brazilian system of governance is long overdue. Although this young democracy has been vibrant since the end of the dictatorship in 1985, the system is entwined with social inequality, impunity and rampant corruption.

There is a widespread desire for a cleaner, more efficient government, but it has long proved elusive. Argelina Figueiredo, a professor at Rio de Janeiro State University, said: “The government needs to go slowly. They are always proposing political reform, but nothing passes. It’s all talk.”

The odds are stacked against Rousseff, a former Marxist guerrilla who was imprisoned and tortured during the dictatorship. If anything, the hurdles seem even higher than at the start of her first term in 2010. There are four main reasons for this.

Firstly, her mandate is far smaller. Despite the advantage of office, the president beat the challenger Aécio Neves by less than 3.3 percentage points, compared with a victory margin of 12 points four years ago. The country is clearly divided. As the red and blue electoral map shows, her support is now concentrated more than ever in the poor north and north-east regions, while the south, and particularly the urban middle class of São Paulo, has turned against her. The battle lines may be less entrenched than in the US or Venezuela, but they are sharpening.

Secondly, Congress is more fractured and tilted to the right. To push legislation through, Rousseff has already done deals with several ideological devils, including rightwing, homophobic evangelicals, the semi-feudal barons of northern states such as Maranhão, and theruralista lobby of big farmers, who killed earlier Workers’ party efforts to conserve the Amazon, expand Indian reservations and allocate plots to landless farmers. Building alliances in the new congress is likely to prove at least as unpalatable.

Thirdly, the stench of corruption is growing stronger. When the Workers’ party came to power in 2002 it promised clean politics, but after 12 years in power, it looks as sleazy as any of its predecessors. The government of former president Luiz Inácio Lula da Silva was tainted by the cash-for-votes Mensalão scandal. Rousseff now faces what may prove to be an even bigger crisis at Petrobras, the state-run oil firm, following revelations of huge financial kickbacks to the ruling party and its allies. In the final week of the election, the rightwing magazine Veja published claims that Rousseff and Da Silva were aware of wrongdoing. They deny this and won an injunction preventing marketing of this story, but the investigations are ongoing and political enemies will be looking at the possibility of using the scandal to force resignations of key officials and perhaps even attempt impeachment. At the very least, the allegations will be a major distraction.

Finally, the broader economic and geopolitical situation is less benign. Thanks to strong Chinese demand for commodities, Brazil was able to shake off the global financial downturn and mark up 7.5% growth in GDP in 2010. This year, however, a slowdown in China has depressed prices of iron and soy, domestic investment and demand are weak, and the Brazilian economy has slumped into recession. Business confidence is at its lowest in a decade, ratings agencies have marked Brazil close to junk status, the real has slumped 34% in the currency exchanges, and global financial markets – as well as the domestic media – have turned aggressively against the Workers’ party, as was apparent by the 6% initial fall in Brazilian stocks as soon as trading began after the election result. Rousseff has acknowledged shortcomings and the finance minister Guido Mantega will step down after eight years. The decision on his replacement will be a key indicator of the direction the government plans to take for the next four years as Rousseff tries to balance calls from her core supporters for more income distribution and pressure from the markets for a more business-friendly economy.

If anything is in the president’s favour, it is low expectations. Despite last year’s protests, the short-lived ascendency of former environment minister Marina Silva, and the ups and downs of an unusually tumultuous campaign, the end result of this campaign is that very little has changed. The two usual parties contested the runoff and the incumbent won again.

Giuseppe Cocco, who teaches at UFRJ, said it was naive to hope for change because the election result was a triumph for the political establishment, which had already crushed the outside challenger, Marina Silva. “The main obstacle to change is a lack of political will,” he said. “The party in power has no interest in a reform that might remove them from power.”

For more than 50 million Brazilians, continuity is clearly no bad thing. The Workers’ party is likely to continue expanding poverty-relief programs, raising the minimum wage and maintaining near record levels of employment, while building stronger alliances in South America and among groups of emerging economies, such as Brics. As the biggest country in the region with the world’s worst inequality, these priorities are still valid. But clearly many in Brazil expect more. The question now is whether the fourth consecutive Workers’ party administration has the dynamism, creativity and nimbleness to address the fresher challenges created by growing middle class expectations, a deteriorating environment (a dire water shortage in São Paulo threatens to be one of the first crises of her second term) and unstable but aggressive capital markets.

“We have done much. We will do much more,” the president promised on election day. She might have added that getting anything done is also going to be much harder.